Shimao Group, a giant Chinese real estate group, has sold their stakes in a major project named Victoria Harbor in Hong Kong, according to Epoch Times.
The deal was paid in cash, with an estimated loss of nearly $90 million.
Shimao Group is ranked 13th among China’s real estate businesses with largest bond issuance.
The group currently holds 22.5% shares and its shareholders’ loans of the three target companies, including Jiayao Development, Delun, and Grand Victoria Finance Company. The target companies were established to own, develop, invest in, market, and manage the Victoria Harbor project in Southwest Kowloon, Hong Kong.
Shimao Group said it plans to publicly confirm the loss of approximately $98.71 million by Dec. 31.
It also plans to use the funds from the Victoria Harbor project’s share sale for business development, debt repayment, and general corporate purposes.
Shimao Group said in early December that it had mortgaged Shimao Tower, their headquarters building in Lujiazui, Shanghai.
In addition to collateral, Shimao Group is also handling the liquidation of its assets.
On the day Shimao Group announced the sale of the Hong Kong Victoria Harbor Exchange project, Fitch downgraded its rating from “BBB-” to “BB.”
Shimao had previously received a Ba1 long-term rating from Moody’s and was placed on a negative watch list. Last month, Standard & Poor’s downgraded the company’s rating to junk.
In recent years, the Shimao Group’s total liabilities have continuously increased.
According to the semi-annual report for 2021, Shimao Group’s total liabilities are $72.78 billion compared with $55.69 billion from the end of 2019.
The group’s outstanding loans also increased by 13.3%, from $22.78 billion at the end of 2020 to about $25.83 billion by mid-2021.